Europe’s dispute with China over the ownership and control of chipmaker Nexperia has intensified, with legal and political interventions threatening semiconductor supply chains, reported Bloomberg.
Semiconductor manufacturer Nexperia is a Dutch subsidiary of Wingtech Technology, a Shanghai-based electronics firm partly owned by the Chinese government.
In October, a Dutch court placed Nexperia under the supervision of trustees, stripping parent firm Wingtech Technology of its ownership rights following allegations of improper technology transfers and resource diversion. The ruling also suspended Wingtech founder Zhang Xuezheng as Nexperia’s chief executive.
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Wingtech has denied any wrongdoing and is appealing the decision before the Dutch Supreme Court, while also engaging in discussions with the trustees to resolve the situation.
Nexperia, based in the eastern Dutch city of Nijmegen, holds a significant position in manufacturing legacy semiconductors used widely in automotive and consumer electronics.
The dispute has disrupted cooperation between Nexperia’s Holland-based company and its key manufacturing site in Guangdong, China, which produces over 50 billion units annually, about half of the company’s output before the conflict began.
In response to these events, both organisations have taken steps to prepare for future operations independently.
The Dutch side has committed approximately $300m to expanding production capacities outside China, aiming for 90% non-Chinese output by mid-2026. Expansion efforts focus on facilities in Malaysia and the Philippines.
The turmoil caused some banks to withdraw financing from Nexperia, including an unused $800m credit line. Despite this, the company stated it remains debt-free with strong liquidity unaffected by recent developments.
Meanwhile, alternative suppliers like OnSemi have indicated readiness to increase production if necessary.
The conflict drew government intervention from both the Netherlands and China.
Dutch authorities imposed oversight powers citing national security considerations, while Beijing restricted exports from Nexperia’s Chinese sites. Deliveries between sites eventually resumed following negotiations but political tensions have persisted.
The uncertainty surrounding supply has affected several automotive manufacturers.
Honda temporarily halted production at multiple plants and Volkswagen sought alternative sourcing options.
ZF Friedrichshafen reduced output due to shortages of critical components.
Major customer Robert Bosch reportedly took measures to maintain supply by transporting wafers from Europe to China; however, this was described as costly and unsustainable.
To address future risks, European governments are discussing subsidies for semiconductor backend production outside China.
In parallel, Chinese carmakers are pressuring domestic authorities to secure reliable supplies.
Regardless of the legal outcome or any potential reconciliation between the two sides of Nexperia, observers note that ongoing disruptions have impacted the company’s reputation and raised longer-term questions about stability within global supply chains.
Georgetown University Center for Security and Emerging Technology senior data research analyst Jacob Feldgoise said: “As countries jockey for control over different stages of the semiconductor value chain, it’s going to lay out these potential breaking points.”
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